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A New York law firm has filed a class action lawsuit against Strategy, accusing it of false disclosures regarding its Bitcoin investment information.
On July 3, The Block reported that the New York law firm Pomerantz has recently filed a class action lawsuit against Strategy, a company led by Michael Saylor (formerly MicroStrategy), accusing the company of making false and misleading statements regarding the profitability of its Bitcoin investment strategy, in violation of federal securities laws. This lawsuit, filed in the Eastern District of Virginia, represents investors of Strategy from April 30, 2024, to April 4, 2025. Other investors can join the class action lawsuit before July 15. The key allegations of the lawsuit include that Strategy exaggerated the profitability of its Bitcoin investment strategy and fund management business, downplayed the volatility risk of Bitcoin, and failed to adequately disclose the impact of adopting new accounting standards (ASU 2023-08) on its financial statements. Specifically, in the first quarter of 2025, due to the adoption of the new standards, Strategy reported an unrealized loss of $5.9 billion in digital assets, causing its stock price to drop over 8% at that time. Pomerantz accused the company of only highlighting Bitcoin gains while concealing the significant losses that could arise under fair value measurement.